Future outlook enhanced by Google Trends

The Commonwealth Bank Household Spending Intentions (HSI) series data to end June 2020 shows that, notwithstanding the concerning increase in COVID-19 cases in Victoria and subsequent reintroduction of lock-down measures, the re-opening of large parts of the Australian economy is clearly evident in a general improvement in spending intentions in June 2020. In a positive sign, Home Buying, Retail sales, Travel (off a very low base) and Entertainment spending intentions all improved in June. After being solid for a number of months, Health and Fitness spending intentions declined in June, while Education spending intentions continued to be soft. Motor Vehicle spending intentions look to have stabilised.

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Spending intentions snapshot

New perspectives can keep you one step ahead

Whether you are running a business, a policy maker, an investor or one of Australia’s corporate enterprises - insights on shifting consumer spending intentions are critical in planning for the future. Our Household Spending Intentions series combines our spending data, one of Australia’s largest financial data sources, with Google Trends publically available search activity. By connecting actual spending data to intentional data, our analysis provides an early indication of prospective spending trends across seven key sectors.  This series covers about 55% of the total household spend. Future releases will look to expand our coverage to the  remaining spending components.

Data-driven insights can give your organisation a new perspective and help you keep a step ahead.

Home Buying Spending Intentions

Home buying spending intentions

  • Home Buying spending intentions recovered much lost ground in June, returning back close to levels seen in March – after much weaker readings in April and May
  • The improvement in June came on the back of increases in both home loan applications and Google searches
  • The RBA’s substantial easing of monetary policy has seen mortgage rates fall to multi-generational lows – especially for fixed rate mortgages. Commonwealth Bank data shows a large rise in new mortgage applications taking advantage of low fixed rates and this should help provide support to home buying in the future

Retail Spending Intentions

Retail spending intentions

  • Retail spending intentions continued their solid rebound in June.  The improvement was seen across a number of categories; including clothing (including school uniforms), grocery stores and supermarkets, household furnishings and equipment, hardware and digital. Not surprisingly, the area of most weakness was in duty free spending
  • This data is consistent with the increase in spending we saw via Commonwealth Bank credit/debit cards through June. This improvement looks to have continued into early July
  • We note that an increased share of retail spending is moving away from cash to credit/debit cards, although the decline in cash withdrawals in Australia seems to be moderating

Motor Vehicles Spending Intentions

Motor vehicle spending intentions

  • Motor vehicles spending intentions stabilised in June, with some initial indications that the improvement that was underway in late 2019 and early 2020 (ie. pre-COVID-19) may be resuming
  • The improvement in June came on the back of gains in Google searches, actual spending via Commonwealth Bank credit/debit cards and applications for car financing

Entertainment Spending Intentions

Entertainment spending intentions

  • Entertainment spending intentions also rebounded in June, led by an improvement in people going out for food and a drink, fast food restaurants, as well as an improvement in recreation spending
  • There was also improvement in spending on digital books, movies books and games and music stores
  • Softness is still evident in spending on art galleries, live music venues, bowling alleys, dance schools, movie theatres and live performance theatres

Travel Spending Intentions

Travel spending intentions

  • Travel spending intentions bounced off a very low base in June.  While air travel numbers remained very weak, the month of June saw a solid increase in Google searches for travel and an increase in actual spending through Commonwealth Bank’s credit/debit cards

Education Spending Intentions

Education spending intentions

  • Education spending intentions remains soft in June, with a rise in correspondence school spending not enough to offset weakness elsewhere
  • Sharp falls continue to be seen in spending intentions on colleges, universities, professional schools and trade and vocational schools
  • With most schools (except in Victoria) expected to be back to on-campus learning after the winter break and with a specific focus on trade and vocational learning as part of the government’s economic recovery plans, the HSI should pick-up some improvement in coming months in this sector

Health and Fitness Spending Intentions

Health and fitness spending intentions

  • Health and fitness spending intentions declined in June, after being relatively strong in previous months
  • The key drivers of the decline in Health and Fitness spending intentions in June were related to softer spending on sports related apparel. Spending on professional sports and sports clubs also remains soft
  • Improvements were seen, however, in medical care and health spending such as dentist, chiropractors, nursing, osteopaths and podiatrists

Enhanced by Google Trends

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